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TMI Blog2023 (11) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... inaccurate particulars of Income. Hence the penalty order u/s. 271(1)(c) of the Act deserves to be considered as void ab initio. The same be held now. 2. The Ld. CIT(A) has erred in confirming impugned penalty of Rs 55,34,03,602/- under section 271(1)(c) of the Act. It is submitted that on the facts of the case and in view of the legal position there was absolutely no concealment of income or furnishing any inaccurate particulars of income and hence the penalty so confirmed deserves to be deleted. The same be deleted now. 3. Without prejudice to the above, the Ld. CIT(A) has confirmed the impugned penalty order passed by Ld. A.O. without appreciating the bonafide explanations of the appellant and as such, the Ld. CIT(A) ought not to have confirmed the impugned penalty under section 271(1)(c) of the Act. It is prayed that impugned penalty so confirmed be deleted in the interest of justice. 4. The order passed by the learned CIT(A) is bad in law and contrary to the provisions of law and facts. It is submitted that the same be held so now." 3. The relevant facts, in brief, are that Appellant filed return of income for Assessment Year 2015-16 on 30/09/2015 declaring 'Nil' incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 162,81,36,515/-. Penalty proceedings were also initiated against the Appellant under Section 271(1)(c) of the Act as notice under Section 274 of the Act was issued to the Appellant on 22/12/2017. The penalty proceedings culminated into penalty order, dated 29/06/2018, whereby a penalty of INR 55,34,03,602/-, being 100% of tax on disallowance of INR 162,81,36,515/-, was levied under Section 271(1)(c) of the Act. 6. The appeal preferred by the Appellant before the CIT(A) against the above penalty order was dismissed by the CIT(A) vide order dated 17/03/2023. 7. Being aggrieved, the Appellant has preferred the present appeal before the Tribunal. 8. We have heard the rival submissions. The primary contention raised on behalf of the Appellant before the CIT(A) as well before the Tribunal was that there was total non-application of mind by the Assessing Officer in as much as the Assessing Officer levied penalty under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income whereas in the notice issued section 274 read with Section 271(1)(c) of the Act the Appellant was asked to show cause why penalty should not be levied for concealing particulars of income. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings to identify such instances of concealment of income Hence, separate penalty proceedings u/s 271(1)(c) are initiated for furnishing of inaccurate particulars which has resulted in concealment of income." 11. Thus, in the assessment order, while recording satisfaction for initiating penalty proceedings under Section 271(1)(c) of the Act, the charge stated is furnishing of inaccurate particulars of income. Whereas on perusal of notice, dated 22/12/2017, issued under Section 274 of the Act, we find that the charge against the Appellant stated therein is that the Appellant had concealed the particulars of income. Similarly, in notice dated 25/06/2018, sent to the Appellant it has been stated that the penalty proceedings in the case of the Appellant were for concealed particulars of income. The relevant extract of the aforesaid notice read as under: "In connection with the penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 for A.Y. 2015-16 in your case for concealment of particulars of your income, You are hereby requested to appear before me on 26.06.2018 at 11.45 A.M. and show cause why an order imposing penalty on you should not be made." (Emphasis Supplied) 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. to 300 per cent. of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under section 274 should satisfy the grounds which he has to meet specifically. Otherwise, the principles of natural justice is offended if the show-cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee. 60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point out the satisfaction of the existence of the grounds mentioned in section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined only to those grounds and the said grounds have to be specifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er clearly records satisfaction for imposing penalty on one or the other, or both grounds mentioned in Section 271(1)(c), does a mere defect in the notice-not striking off the irrelevant matter-vitiate the penalty proceedings? 181. It does. The primary burden lies on the Revenue. In the assessment proceedings, it forms an opinion, prima facie or otherwise, to launch penalty proceedings against the assessee. But that translates into action only through the statutory notice under section 271(1)(c), read with section 274 of IT Act. True, the assessment proceedings form the basis for the penalty proceedings, but they are not composite proceedings to draw strength from each other. Nor can each cure the other's defect. A penalty proceeding is a corollary; nevertheless, it must stand on its own. These proceedings culminate under a different statutory scheme that remains distinct from the assessment proceedings. Therefore, the assessee must be informed of the grounds of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness." (Emphasis supplied) 16. On perusal of the above, it can be seen that the penalty notices put the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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